Synlait announces FY20 full year results

Monday 28th September 2020

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Synlait Milk Limited (Synlait) today published its financial result for the 12 months ended 31 July 2020.

Financial highlights:

• Revenue up 27% to $1.3 billion

• Earnings before interest, taxes, depreciation, and amortization (EBITDA) up 13% to $171.4 million

• Net Profit After Tax (NPAT) down 9.0% to $75.2 million

• Consumer-packaged infant formula sales up 15% to 49,180 MT

• Lactoferrin sales up 46% to 30 MT

FY21 guidance statement:

• There continues to be significant global uncertainty regarding COVID-19.

• While Synlait has proven its ability to maintain operational continuity over recent months, in terms of demand for the products it manufactures, it expects:

• Consumer-packaged infant formula volumes to be similar year-on-year, with lower demand in the first half of FY21 due to higher than normal stock levels in the supply chain. Synlait expects a return to growth in the second half of FY21 once stocks have cleared.

• Strong underlying EBITDA and operating cash flows to continue, with growth delivered from a full year of Dairyworks earnings and the integration of Talbot Forest Cheese.

• No disruption to manufacturing or demand for its ingredient and lactoferrin business.

• This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour, channel dynamics and supply chain disruptions all subject to change.

• This is offset by the carrying costs of investing in Synlait Pokeno and Synlait Dunsandel’s Advanced Dairy Liquid Packaging facility. Earnings from these investments are expected to be delivered in FY22 and beyond.

• As disclosed today, Synlait is in the process of finalising a long-term supply agreement with a new, multinational customer for packaged products which is expected to have a positive impact on earnings from FY23.

• Against this, we are targeting a similar, or slight improvement on, our FY20 NPAT result.

• A further update will be provided at Synlait’s half year result in March 2021.

See links below for more details:

• Synlait FY20 Financial Statements

• Synlait FY20 Investor Presentation

• Synlait FY20 result published

• Shareholder Letter

• Synlait NZX Results Template

Source: Synlait Milk Limited

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